Medicaid-ExpansionThe Challenges with Medicaid Expansion in Virginia

As healthcare reform occurs throughout the nation, Virginians voice their opposition to Medicaid expansion.

Funding Limitations

The promised levels of Federal funding for Medicaid expansion cannot be fulfilled.

The evidence is mounting. Paul Ryan, chairman of the House Budget Committee, recently stated that funds will not be available for Medicaid expansion.

The funding streams for expansion have been greatly impacted by the disastrous roll-out of the ACA. The federal government has recently refused to pay what they promised to Indian tribes for medical services. Health insurance companies are guaranteed a bailout because not enough young people are singing up for health insurance.

President Obama ignored the law eight times to try to save the ACA.

“If the federal government can ignore its contractual obligations, its own statutes and its own Supreme Court, then it certainly can ignore its own funding formulas too,” Richmond Times-Dispatch columnist Bart Hinkle stated.

The Cost in Virginia

In the outlying years, Medicaid expansion will bankrupt Virginia.

Chmura Economics & Analytics estimated that Medicaid costs for Virginia will be just under $200 million per year in 2020.

If the reimbursement rate goes to 50 percent, the estimated cost to Virginia is two billion dollars per year, quickly consuming any savings between 2014 and 2016. The 50 percent match is likely to occur because President Obama has already suggested a “blended” reimbursement rate between 50 percent and 100 percent (see Medicaid time bomb). Currently, the Virginia legislature has no plan to deal with the budget shortfall when the 100 percent reimbursement begins to ratchet down in 2017. It would be extremely shortsighted for the legislature to consider expanding Medicaid until the hard decisions are made to address these budget challenges.

DMAS Reform Shortcomings

DMAS reforms are far from complete. Most of the reforms are only in the very early stages of implementation and have not been proven to be successful.  The reforms in place must demonstrate positive results before expansion is even considered.